BofA Securities has maintained its buy rating on Ashok Leyland while raising its target price to ₹180 per share, stating that medium and heavy commercial vehicle (MHCV) demand should remain resilient through FY26 despite uneven recovery across segments. The brokerage said the company’s management has guided for mid-single-digit MHCV growth in FY26, supported by favourable underlying indicators such as improving truck rentals and an ageing fleet that continues to create replacement-led demand.
According to BofA Securities, while the high-tonnage segment is yet to fully recover, pricing discipline, cost optimisation and rising non-truck revenue streams are expected to expand margins by 50–60 basis points in FY26. The brokerage highlighted that Ashok Leyland remains focused on its medium-term margin aspiration of 15%, backed by supply-chain efficiencies, a more balanced revenue mix and incremental gains in export and defence businesses.
BofA noted that the replacement cycle is taking longer due to structural changes in freight patterns and customer behaviour, but expects the demand environment to gradually broaden out. Despite the uneven traction across sub-segments, the brokerage believes that Ashok Leyland is positioned to benefit from cyclical recovery, stable utilisation levels and improving profitability trends.
Disclaimer: The views and recommendations above are those of BofA Securities. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
